Market Update

General - Horizon Gold

Good afternoon

the demise of Thomas Cook did not help today - but main reason for weak equity markets in Europe today have been very weak PMI´s. I think recession in German is now a done deal! Manufacturing is clearly under pressure! The Euro fell after the numbers were announced, and is trading at the lowest level since May 2017.US PMI is looking much better ! At 51, it´s a little stronger than expected.

Despite the strong US$, gold is advancing a little and is trading at 2250 A$/oz currently. Gold stocks in the States are having another strong day…

Metals are weaker as well - only nickel is up again . Platinum / Palladium continue their big run.

More M&A at the junior end….Osisko bidding for Barkerville, paying with paper in a pre-market 338 mill CAN$ valuation.

Horizon Gold - the small company had a pretty big run in the recent run-up of gold, from 15ct to 42ct…But more recently, the stock has come back again to the current 30.5ct. I guess the market is anticipating a capital raising at some stage, and given the cash holding of 1.9 mill A$ as at the 30th of June, probably rightly so - definitely before Christmas. The market cap of 23.3 mill A$ I think is a sexy entry point, though. HRN have a resource of 1.39 Mill oz, of which 2/3rd are free milling - the rest is refractory ore, and at this point, I am not valuing it. But especially the two open-pittable high grade resources, Swan and Swift, with a combined 410.000 oz at 7 g / t gold resource, are subject to mining studies, using a standalone plant, but also processing by neighbouring plants. This could generate pretty meaningful cash flow. I am just speculating here ( the company has not released the potential size, nor any other parameters ) , but assuming 200.000t of yearly mining rate, and trucking + toll-treatment at say 1700 A$ total cost , could result in something like 40.000 oz of production and at current, elavated gold prices, cash flow of 22 mill A$ p.a. ! I have no idea, how much the pre-production cap ex might be - but even a 15 mill $ number would still make it a highly attractive proposition! These numbers really just for giving you a feel - they are highly speculative at this point. I would expect some more - at least preliminary - numbers from the company before year end. But in any case, I think the stock could easily re-visite recent highs over the next few month, given the very low valuation for ounces in the ground, and good exploration potential for base metals and gold. I have a small holding in HRN.

I fear not much to report today!

Have a nice evening


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